RSM replaces Grant Thornton as Patisserie Valerie auditor

The parent company of high street cake chain Patisserie Valerie, which has been plunged into financial difficulties following the discovery of accounting irregularities, has announced it intends to appoint RSM as its auditor, replacing Grant Thornton

In a stock exchange statement, the company said: ‘Further to the recent press speculation, Patisserie Holdings confirms that it intends to appoint RSM UK Audit as new auditors in replacement of Grant Thornton UK once the necessary professional processes have been completed.’

The filing by Patisserie Holdings initially reported that the company had elected RSM Tenon as the auditor to replace Grant Thornton. This was later amended to RSM UK Audit LLP. RSM Tenon went into administration in August 2013.

Last month the Financial Reporting Council (FRC) announced it is to investigate Grant Thornton’s audit of the financial statements of Patisserie Holdings for the years ended 30 September 2015, 2016 and 2017 under its audit enforcement procedure.

It will also conduct an investigation under the accountancy scheme into former CFO Christopher Marsh’s preparation and approval of Patisserie Holdings Plc’s financial statements and other financial information provided by Marsh.

In October the AIM-listed company issued a shock warning that it had found ‘significant, potentially fraudulent, accounting irregularities and therefore a potential material mis-statement of the company's accounts’.

This was followed shortly after by news of the discovery of a winding up order against the company brought by HMRC over a £1.4m tax bill and the uncovering of two separate £10m loans negotiated with the café’s lenders which had not been reported to the board.

Marsh, who was arrested and then released by police, resigned and the company has since overhauled its top management and had a £20m injection of cash from one of its main backers, entrepreneur Luke Johnston.

Grant Thornton was paid £120,000 for its audit of Patisserie Holdings last year, according to the 2017 annual report and accounts. It has been the company’s auditor since it listed on AIM in 2014.

Report by Pat Sweet

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